Tuesday, October 29, 2013

I'm not the one to be into conspiracy theories but with several Dreamliners waiting on the flightline at both Charleston and Everett and seemingly done with their customer acceptance flights, I think Boeing is planning to deliver many of these aircraft at the same time so that the airline that will take the 100th delivery remains safely anonymous until the last moment.

Call me paranoid but it does seem that way. Boeing is flying quite a few test flights some within a day of the previous flight so that they can try and deliver them by October 31st.

Lastly, Matt Cawby tweeted that ZB001 (LN 133, N789FT) has its registration sticker attached thus indicating that first flight of this aircraft is imminent. I am guessing that it may take place by the end of this week.

Friday, October 25, 2013

According to the firing order for Everett, Boeing is planning to gradually increase the production rate at Everett using both the permanent and surge line. Boeing had placed 4 current in production 787s on the surge line in 40-24 leaving open the first two positions on the main final assembly line in 40-26 open. The last two positions are occupied with ZB021 (LN 139, N789ZB) and ZA560 (LN 141). This allows Boeing to increase the production rate without impacting any upstream or downstream airframes. Starting next week, Boeing will be loading a 787 every 4 to 6 days. In 40-26 the period between loadings looks to be about 10 days while in 40-24 the period between loadings appears to be about 10 to 11 days. This means that a 787 should be going through each line in about 40 days or less. When Boeing loads a 787 every 3.5 days in Everett (between both main and surge lines) they will be hitting a rate of about 8.5 787s per month which coupled with the 1.5/month from Charleston allows the 787 program to attain the 10/month. I think they'll still achieve this rate sometime in early to mid December.

The air around Everett is getting clearer, literally. Everett has been plagued by a constant bank of fog over the past few days which has severally limited test flight operations of the 787. It hasn't had an effect on flights from Boeing Field as ZB001 continues to fly from that airport.

Today alone Boeing sent up 5 production 787s from Everett and was planning to send a sixth one up on its first (B-1) flight. This airplane was ZA435 (LN 131, B-2731) and is slated for delivery to Hainan Airlines sometime next month. Boeing is appearing to make a huge last push to get at 5 to 8 deliveries done by end of the month and it does seem plausible that they can do it. If they were to do this then they can at least match the most 787 deliveries in one month if not surpass it. They would also deliver the 100th 787 to a customer. We'll know by next Friday if they were able to attain this.

In closing let me leave you with one last thought:

Always be yourself. Unless you can be Batman.. Then be Batman.
— Ted (@OfficialTedSays) October 25, 2013

Wednesday, October 23, 2013

During the 3rd quarter earning conference call, Boeing CEO Jim McNerney reiterated Boeing's intention to launch the 777-8 and 777-9 later this year.

Current market expectations has Boeing's Board giving its formal blessing later this month (October) with the formal announcement coming at the Dubai Air Show which is scheduled to take place from November 17 to November 21st.

It is fully expected that Emirates, Qatar and Ethiad (the later is expected to increase its 787 order). Now according to Saj Ahmad, it is also expected the Cathay Pacific could place a significant 777X order either before or at the air show which may also be firmed at the show. Here's how I think 777X orders could shape up in the next month:

In their 3rd quarter earnings announcement this morning, Boeing said they will increase the 787 production rate in 2016 from 10 to 12 aircraft per month eventually increasing to 14/month by the end of the decade. Even though the fact that they are increasing the production rate comes as no surprise, the announcement coming this early was. I was expecting an announcement of production increase next year.

Even though they haven't announced which site will benefit from the rate increase, I fully expect that Boeing South Carolina (Charleston) will see most if not all the increase in the rate of the 787. This rate increase is being timed with the need to produce 787-10 aircraft in sufficient quantities by 2017 which is when Boeing expect to start testing the double stretch of the 787. I can also see some interim production increases (to 11 in 2015 and to 13 in 2017-2018).

This announcement also will fuel the discussion as to where the 777X will be built. With JALs announcement that they will buy the A350, there is increasing outlook that Boeing will build more of the new large jet outside of Japan (even if ANA orders it). I believe that Boeing will build this airplane in Everett and assuming that the future 787 increases are built in Charleston, I can see a stronger case that the final assembly of the 777X will take place in Everett.

From Boeing's press release:

During the quarter, the 787-9 completed first flight. With the successful launch of the 787-10 and continued strong demand for the 787 family of airplanes, the company intends to increase the 787 production rate from 10 to 12 per month in 2016, with plans to increase to 14 per month before the end of the decade.

@ureshs Looks like all the flight test equipment was removed while on the flight line
— Paine Airport (@mattcawby) October 17, 2013

It appears that Boeing is preparing ZA005 for its second career with a paying customer, possibly a BBJ customer, by starting change incorporation at the EMC. It will have to have the orange test flight wiring removed and be bought up to certification specs which may take as long as a year or more. Its sister ship ZA006, also GE powered, has been in San Antonio, ostensibly going through change incorporation as well but has been there for well over a year. This may indicate that Boeing doesn't have a customer for it as of now and are going slow on the change incorporation.

ZB002 still on the flightline, has open panels and doesn't have the aircraft registration applied to it. This indicates that the aircraft is not yet ready to fly but I still anticipate that it will fly towards the end of next week.

Lastly, I'd like to leave you all with a the profound thought of the day:

If spiders ever realize that people are terrified of them, We’re fucked.
— Ted (@OfficialTedSays) October 18, 2013

Wednesday, October 16, 2013

Mid way through October Boeing has delivered 46 787s which is the same number that they delivered in all of 2012. They've made great progress in bouncing back from the battery issues that grounded the world wide fleet and halted deliveries. Through Oct. 6th, Boeing has delivered 95 787s and looks to deliver the 100th 787 later this month.
Which one will get that honor is up in the air but it should still happen this month as there are several 787s that are in the middle or have completed their production testing.

Given we're at month end I think there is a little bit more clarity to the delivery schedule for the rest of this month. So far in October Boeing has delivered 6 787 including 4 from Charleston. Boeing, I believe, can deliver another 6 to 8 aircraft as follows:

While it looks good that the US government may reopen as early as tomorrow this could help with the deliveries to US-based buyers like ILFC. ZA562's deliver, it seems, has been delayed as the FAA's registration office in Wichita, KS has remained closed because of the budget debacle.

While Boeing has been pretty aggressive with conducting production flights for the first half of the month, things seems to have quieted down in the last couple of days indicating that Boeing may be making taking some corrective action on the airplanes that they have flown before conducting customer acceptance flights or are preparing for those customer flights which would get underway shortly. Additionally, Boeing is preparing to fly the second 787-9 (ZB002, LN 133, N789FT) within the next week though no date has been given. So far the 787-9 test program has accumulated just under 94 flight test hours.

Looking ahead, it seems that Boeing might be gearing up to increase 787 output per their plan. 10/month by the end of the year is still their goal and they seem to be on the verge of achieving it. Sources have told me that LN 158 will be the first airframe that will be produced at 10/month. This aircraft is slated to be built in Charleston. Boeing appears to be loading a 787 frame into position 1 every 14 to 16 days. Extrapolated this would mean that ZA244 (LN 158, VT-ANP) should load (and Boeing would start producing 10/month) around December 8th. Boeing is quickening the production rate which did slow down due to the 787-9 flight test aircraft assembly.

Lastly, with the government shutdown seemingly coming to an end, I'd like to leave you all with this:

So... the good news is that you're getting the government back, and the bad news is that you're getting THAT government back.
— SarcasticRover (@SarcasticRover) October 16, 2013

Friday, October 11, 2013

Boeing is conducting an aggressive effort to deliver a large number of 787s this month. Even before mid month Boeing has delivered 5 787s many of these a spillover from September when they were expected to be delivered. Through today, October 11th, 2013, Boeing has delivered 94 Dreamliners and will more than likely deliver it 100th 787 later this month. Right now it's way to early to speculate to whom the 100 delivered 787 will go to as it depends on the progress of production flights.

Undeniably Boeing has been making a big push to deliver as many 787s as possible. Today, alone there were 4 test flights including 2 B-1 flight. A third was scheduled but didn't fly. There are 3 Dreamliners that appear to be ready for delivery including the 6th for China Southern and the 2nd for Aeromexico. One factor that can hinder deliveries, at least to US owners, is the continuing government shutdown. While Boeing has the FAA inspectors back on the job at Charleston, the FAA still does not have its employees back in the office that process the aircraft registration and title transfers. Boeing said that they can be mailed in but there still may be some delays due to the shutdown. Deliveries to ILFC and United can be affected as well as to US based BBJ customers, for one of whom there is an aircraft about to start assembly. Given the progression here's how I see the remainder of October shaking out in terms of 787 deliveries:

Other deliveries that may take place this month:
Air India (from Everett)
Japan Airlines (from Charleston)

Deliveries from Charleston have resumed after almost 3 months which is very good news. Between September 30th and Oct. 9th, the Charleston facility delivered 4 787s and can deliver anywhere from 3 to 5 more this month which will help tremendously with the inventory there. What will be interesting to see is whether Boeing can bring down the number of production test flights required for the Charleston built 787s. The aircraft that were delivered recently needed many more flights than the ones built at Everett but this is probably attributable to Charleston still trying to ramp up the learning curve. As time goes on the build quality should improve. Everett wen through the same thing with some of the early delivered 787s.

Lastly the second 787-9 is getting close to making its first flight and joining its sister-ship at Boeing Field for test and certification activities. ZB002 (LN 133, N789FT) was just moved from the fuel dock at Everett to a stall space on the flightline. It should fly by Oct. 24th if it encounters no issues on pre-flight ground testing that should commence shortly. To put the schedule in perspective. It took ZB001 (LN 126, N787EX) 24 days from roll out to first flight. ZB002 rolled out on September 30th and applying the same metric to this aircraft should give a first flight date of around Oct. 24th. I do expect it to fly earlier than that as Boeing has improved knowledge from the ZB001's pre-flight. Again this all assumes that ZB002 doesn't have any issues in the run up to first flight. Another interesting stat is that ZB001 took 86 days in final assembly including painting and installation of test equipment. ZA002 improved that number by 6 days to a total of 80 days in final assembly. Boeing should be able to apply lessons learned from the first aircraft to get the 2nd aircraft up sooner. We'll know by the 24th.

Wednesday, October 2, 2013

There was high expectations that Boeing would have delivered quite a few 787s during September in an effort to improve quarterly results, however, Boeing managed only 5 deliveries during the past month. On a bright note, it seems that there can be a good number of aircraft that should be delivered in early October as their delivery dates were pushed to the current month. Boeing was very aggressive in production test flights in the effort to deliver many Dreamliners including the first aircraft to Jetstar (QANTAS) and Royal Brunei Airlines. Additionally there were several 787s in Charleston that were expected to be delivered in September including aircraft for Air India, China Southern, Hainan, Qatar and LAN. Hainan was delivered in September while China Southern was delivered on Oct. 1 and flew away on Oct. 2nd. Boeing had to fly a lot of test flights on the 5 airplanes that they were trying to deliver from Charleston. None of the aircraft for the above mentioned carriers flew fewer than 8 test flights with one 787 for LAN recording 13 flights. Two of these aircraft should deliver in early October with the Air India delivery on hold due to the usual financing issues with Air India.

Everett faired a little bit better but Boeing was planning to deliver the first 787s each to Jetstar and Royal Brunei. These airplanes are still at Everett and I believe they should deliver in the early part of October as well. All in all September was a very slow month for 787 deliveries and part of it may be due in part to customers being very picky during customer inspections (Qatar) as well as continued media reports about breakdown, cancellations and delays of the 787s in service with the customers. Amongst the most vocal airlines regarding the teething issues are Norwegian, LOT Polish and Qatar. However, it is a little disconcerting that aircraft built at Charleston had to fly more test flights (Boeing and customer) than those built at Everett though there were 787s that were assembled at Everett, especially the ones that were delivered in 2011 through mid 2012, that had to undertake numerous test flights. Undoubtedly, as the Charleston team improves efficiency and their experience the number of test flights and squawks will trend downward.

So what should we expect for October? This is difficult to say for several reasons: 1) Any issues at Charleston which currently has 8 787s waiting to be delivered and 9th that will be coming out soon. 2) Increase scrutiny by customers of their aircraft prior to deliveries which can lead to more customer flights 3) unpredictability of certain customers to take deliveries (Air India, China Southern, Hainan, and Qatar). There is a fourth issue which may come up and that is the current government shutdown that can affect 787 production particularly with the 787-9 but also on changes with the 787-8. Boeing has already spoken about this. With the US Government shutdown there aren't any FAA inspectors to carry certification work and that could have a significant impact on deliveries. I'll be watching this carefully. I do think that we can see 9 to 10 787 deliveries mainly because of the spillover of missed September deliveries into October.

Lastly, Boeing announced that the 787-9 has completed Initial Airworthiness Testing which clears the way for Boeing 's engineers to fly aboard the aircraft in order to collect data. Boeing has completed just under 50 hours of testing over the last two weeks. The second test flight aircraft, ZB002 (LN 133, N789FT) was rolled out around Sept. 30th. It spent 8- days in production vs. 86 for ZB001. ZB001 flew 24 days after being rolled out. If I apply the same metric to ZB002 then it should fly (barring any issues or unknown unknowns) by October 24th. I believe it can fly by mid October.